Reviving demand start of multi-year growth cycle: Rajesh Gopinathan, CEO, TCS

A spate of multi-billion dollar deals, including big wins in the September quarter, is helping Tata Consultancy Services (TCS) shed pandemic-induced blues earlier than expected, according to chief executive Rajesh Gopinathan. In an interview with Anandi Chandrasekhar and Ayan Pramanik, he termed the revival in demand for technology services as just the beginning of a multi-year growth cycle for India’s largest software exporter, which announced a ₹16,000-crore share buyback on Wednesday. While analysts have suggested this will boost parent Tata Sons’ efforts to acquire Shapoorji Pallonji Group’s 18.4% stake, TCS has maintained that the buyback route was taken to “balance needs and demands of multiple stakeholder communities.” Declaring his company’s intention to go for both “large” and “small” deals as technology spending accelerates globally, Gopinathan indicated the $22.03-billion company is also partnering with the Tata group as it aims to launch a “super app” for Indian consumers. ‘A Key Driver to Deal Momentum’What form will the first phase of the multi-year “transformation cycle” in the technology services market take? The first horizon of this transformation is migration from primarily on-premise data centres to a hybrid and public cloud infrastructure, which the pandemic is significantly accelerating. As enterprise workloads migrate to the cloud, it will unlock (greater) technology adoption, triggering a second phase. A lot more cross-industry leverages will happen and finally, a more seamless, common unifying technology fabric will lead to (formation) of industry ecosystems.Do the deal wins — $8.6 billion in the September quarter — announced by TCS indicate an overall recovery for the industry?I would like to delink the specific number from the larger commentary, (as it) is the momentum we are seeing. (The number) includes the $2.5-billion contract (of European life insurance firm Phoenix Group) announced a few quarters ago. If you put that aside, contracts in the current quarter are $6.1 billion, compared to $6.9 billion last quarter. Key drivers have been the long-standing relationships with our customers. As they look to adopt these cloud platforms, they prefer partners who can both accelerate and de-risk this shift for them. As we have invested in many of these transformative technologies across infrastructure, customer and employee experience, we are seen as a strategic partner. We also focus on talent development and train ahead of the curve. All three elements are playing into this upcycle that we are seeing. Is there a shift towards bagging large, long-term deals that deliver steady revenue?We’ve been pioneers in deals of all sizes and forms, be it services or platforms; it is a core part of our overall service and go-to-market portfolio. We take a balanced view, which is both, large deals as well as small implementation and support. What’s the progress on the ‘super app’ being built by the Tata group? Is TCS heading this initiative?We are obviously technology partners to Tata Digital, and it leverages TCS IP and services. The company goes over and beyond that too but… I would defer to them (Tata group) to comment about their specific initiative.TCS is among the top 10 companies that have a high level of dependency on work visas. What are your plans, given the announcement to further restrict H-1B visas in the US?We have significantly reduced our visa dependency. By our sheer size, obviously, we will be big, but in terms of percentage dependency, we have gone down. Of course, we maintain an ongoing dialogue with regulators and authorities in all jurisdictions.

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